Secretary Gates today gave a speech about cutting overhead costs for the entire DoD by 2-3%:

Specifically mentioned: HQ functions in Europe. Also discussed was reducing ranks of deputies from two star to one star.

Also mentioned was the fact that after the post cold war cuts of 40% troop strength in the 90s, the number of general officers/admirals was only cut 20%...

In light of his cuts to programs, and budget realities, cutting the HQ functions makes sense I guess. One wonders how much resistance he will get though.

Full text of the speech here: